Why does the market not clear with a production quota

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Reference no: EM131248455

1. Why does a market clear when the government imposes an excise tax of $T per unit?

2. Why does a market clear when the government gives producers a subsidy of $S per unit?

3. Why does the market not clear with a production quota?

4. With a price floor, will the most efficient producers necessarily be the ones supplying the market?

Reference no: EM131248455

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